Opinion
No. CV05-4004573-S
December 12, 2007
MEMORANDUM OF DECISION
The plaintiff, Daniel Mina, has brought a two-count complaint against the defendants, Anival Betancourt, Champs Cafè, LLC (Champs) and Michael Digiovancarlo, claiming damages and other relief associated with a claimed partnership interest in a bar/restaurant located in Waterbury.
In the first count of his complaint, which is directed against Champs and Betancourt, the plaintiff alleges that Betancourt was the owner of Champs, and that in June of 2003 he and Betancourt entered into a partnership agreement whereby he became an equal partner with Betancourt and obtained the right of first refusal should Betancourt ever decide to sell the business. The defendants admit these allegations in their answer. The plaintiff further alleges in count one that he paid certain moneys for the partnership interest, oversaw improvements to the bar, managed and worked at the bar, and paid for improvements to the bar and the business. The relationship between the plaintiff and Betancourt broke down sometime in September of 2004 when Betancourt locked him out of the restaurant. Subsequently, Betancourt sold the business to Jonathan Torres sometime in February 2005. (Exh. D.) This action was commenced thereafter.
In the second count of his complaint directed against Digiovancarlo, the plaintiff alleges that Digiovancarlo was the owner of the premises on which the bar was located, 1298 North Main Street in Waterbury, that Digiovancarlo entered into an agreement to sell and lease the premises to him and Betancourt, and that, in reliance on that agreement, he spent moneys improving the premises. He claims damages and specific performance of the agreement to sell the North Main Street property.
On September 12, 2007, the trial commenced. Prior to the presentation of evidence, the plaintiff, without objection, submitted a withdrawal of the action as to Betancourt. The plaintiff marked as exhibits a quitclaim deed executed by Betancourt (Exh. 2) purporting to transfer his interest in Champs to the plaintiff, and a release (Exh. 1) of all claims by the plaintiff as against Betancourt including the claims asserted in the present case. There was language in the quitclaim deed that the plaintiff could pursue his claim "for assets and for Champs Cafè LLC."
The allegations of the first count of the complaint insofar as they pertain to Betancourt are moot, based on the withdrawal of action filed as to him. "Mootness implicates subject matter jurisdiction, which imposes a duty on the court to dismiss a case if the court can no longer grant practical relief to the parties." Hechtman v. Savitsky, 52 Conn.App. 654, 657, 772 A.2d 673 (2001). "[T]he question of subject matter jurisdiction, because it addresses the basic competency of the court, can be raised by any of the parties, or by the court sua sponte, at any time . . . Moreover, [t]he parties cannot confer subject matter jurisdiction on the court, either by waiver or by consent." (Internal quotation marks omitted.) ABC, LLC v. State Ethics Commission, 264 Conn. 812, 822-23, 826 A.2d 1077 (2003). "[M]ootness presents a circumstance wherein the issue before the court has been resolved or had lost its significance because of a change in the condition of affairs between the parties . . . In other words, the ultimate question is whether the determination of the controversy will result in practical relief to the complainant." (Internal quotation marks omitted.) Gerlt v. South Windsor, 284 Conn. 178, 189, 931 A.2d 907 (2007). The plaintiff, in his brief dated October 15, 2005, does not think it necessary to have the court order specific performance of the sale of Champs since he believes that has occurred (Exh. 1). The deed speaks for itself; the court cannot grant the plaintiff practical relief because the requested performance has already transpired. Notwithstanding the fact that there is a question whether this relief was alleged, proved or prayed for in the complaint, the court does not have jurisdiction to consider this request.
The plaintiff, in his brief, asks the court to find that, by virtue of the quit claim deed (Exh. 2), Betancourt conveyed his interest in Champs to the plaintiff. There are no allegations in the complaint or prayer for relief seeking an analysis of the quitclaim deed. The plaintiff's request appears to be in the nature of declaratory relief, as he recognizes that "there is therefore no need for a further order of specific performance"; however, "ordinarily a court may not grant relief on the basis of an unpleaded claim." Stafford Higgins Industry, Inc., v. Norwalk, 245 Conn. 551, 575, 715 A.2d 46 (1998). There was some evidence that Champs had already been sold prior to the quitclaim deed from Betancourt to the plaintiff, which is disputed by the plaintiff; regardless, this issue is not properly before the court.
The court will now consider the claims as alleged in the second count of the complaint against Digiovancarlo. The facts are very much in dispute. Betancourt was the principal of Champs, which operated a bar and restaurant on North Main Street in Waterbury. Sometime in late June of 2003, Betancourt, who was at that time a very good friend of the plaintiff, entered into discussions with the plaintiff about the latter acquiring a fifty percent interest in the business. The precise terms of this agreement are unclear, but in any event, Betancourt acknowledges that he entered into a partnership agreement with the plaintiff in late June of 2003. In early July of that year, the plaintiff and Betancourt met with Digiovancarlo, the landlord, who owned the business premises at 1298 North Main Street, for the purpose of discussing an option to purchase the premises. At that time the business occupied the entire first floor of the building on the premises. There was some disputed testimony as to use of the second floor and whether the business had the right to use the upper floor; there is no question that the second floor was not leased to anyone else. On July 2, 2003, the plaintiff, Betancourt and Digiovancarlo met at the restaurant and entered into a handwritten agreement entitled "Non-Refundable-Deposit" (Exh. 3) which provided that the plaintiff and Betancourt would have the right to purchase the building for one year at a price "from [$]146,000 to [$]150,000." The agreement recited that Digiovancarlo received an initial nonrefundable deposit of $6,000 and provided that two subsequent deposit were required, $4,500 due eight weeks from the date of the agreement and $4,500 due sixteen weeks from the date of the agreement. The agreement provided that "any missed payments will result in bre[a]ch of contract." No further deposit payments were ever paid to Digiovancarlo.
Betancourt and the plaintiff met with the plaintiff's lawyer, Joseph Horzepa, in late August of 2003 and again on September 8th or 9th. Attorney Horzepa advised them that the agreement (Exh. 3) appeared to be enforceable, but that he thought that they should have a more formal agreement because the language was not clear, and that they should talk with Digiovancarlo about securing a clearer option agreement and a new lease. He advised both the plaintiff and Betancourt that they should not make the called-for additional deposits until they had these documents. The plaintiff testified that he talked with Digiovancarlo, who agreed to allow an extension of the strict deposit requirement under the agreement (Exh. 3). More credible, however, was the testimony of Digiovancarlo that he never agreed to any change or extension of the deposit requirements under the agreement of July 2, 2003 (Exh. 3) and that when the deposits were not made in accordance with the terms of the agreement (Exh. 3) he considered the contract breached. The Court finds that Digiovancarlo never agreed to any extensions of the deposit payments.
The court must now determine the nature of the "nonrefundable deposit" agreement (Exh. 3) entered into between the parties on July 2, 2003. "An option contract and a contract of sale are in fact two separate and distinct contracts, namely, an option contract, and an agreement to sell. An option . . . is not a contract by which one agrees to sell and the other to buy, but it is only an offer by one to sell within a limited time and a right acquired by the other to accept or reject such offer within such time . . . The distinction between a contract to purchase and sell real estate and an option to purchase is that the contract to purchase and sell creates a mutual obligation on the one party to sell and on the other to purchase, while an option merely gives the right to purchase within a limited time without imposing any obligation to purchase . . . Whether the agreement in question is to be construed as a mutually binding contract of purchase and sale or a mere option to purchase is a question of the intent of the parties, to be determined, as a matter of fact, from the language of the contract, the circumstances attending its negotiation, and the conduct of the parties in relation thereto." (Citations omitted; internal quotation marks omitted.) Cutter Development Corp. v. Peluso, 212 Conn. 107, 110-11, 561 A.2d 926 (1989).
In the present case, the agreement provides that Digiovancarlo "will not be able to sell building 1298 North Main St. for one year" and that "[a]ny money in this time period will go towards the sale of the building sale price will be from [$]146,000 to [$]150,000 no higher no less." That is, Digiovancarlo agreed not to sell the property for a year in return for several nonrefundable deposit payments which, in the event the plaintiff and/or Betancourt purchased the property, would go towards the purchase price. The plaintiff viewed this as an option contract, and the terms of the contract support this interpretation. The court concludes that the parties entered into an option contract. The next inquiry, then, is whether the plaintiff breached the contract by failing to pay the second two deposits required by the contract.
"To be effective, an acceptance of an offer under an option contract must be unequivocal, unconditional, and in exact accord with the terms of the option . . . Where there is ambiguity in the language of the agreement, option contracts are generally strictly construed against the optionee . . . If an option contract provides for payment of all or a portion of the purchase price in order to exercise the option, the optionee, to be entitled to a conveyance, must not only accept the offer but pay or tender the agreed amount within the prescribed time . . . In such cases, a mere acceptance of the offer, even though unequivocal, is insufficient to exercise the option . . . The determination of the terms and conditions of [an] option contract must be resolved, in the absence of supplementary evidence of the intent of the parties, by reference to the terms of the contract itself." (Citations omitted; internal quotation marks omitted.) Smith v. Hevro Realty Corp., 199 Conn. 330, 339, 507 A.2d 980 (1986). In Hevro Realty, the court held that the failure of one of the defendants to pay, in accordance with the option contract, a deposit upon acceptance of the option to purchase within a reasonable time breached the agreement. Id., 342-43.
'The present case differs somewhat in that the plaintiff has failed to pay several required installment deposits necessary to keep the option open, but the analysis does not change. For example, in Astor Street Financial, LLC v. Green, Superior Court, judicial district of Fairfield, Docket No. CV 06 6000402 (May 2, 2007, Arnold, J.), the parties executed an option agreement according to which the plaintiffs would pay a $250,000 "option fee" upon execution, and another $250,000 option fee within eight months of the date of the option, which would be applied to the purchase price if timely made. The option was to expire just over a year from the execution of the agreement. The plaintiffs paid the initial fee; subsequently, four days before the second installment became due, they paid the second fee into escrow with a third party pending the scheduling of a closing date with the defendant. The court, in granting the defendant's motion for summary judgment, reasoned that "[t]he option fee was by its nature a fee to be paid at the time the option was exercised. If the plaintiffs could wait until the closing to make this $250,000 payment, the payment would have been designated as part of the purchase price, which the defendant would be entitled to retain in the event the plaintiffs did not close in accordance with the purchase and sale agreement." Id. Therefore, the failure to timely make any payment required by the contract, even if not a final payment, constitutes breach of the agreement.
Although summary judgment was also granted on statute of limitations grounds; see § 47-33a; the court made much of the fact that the plaintiffs had not complied with the strict installment payment required by the contract, concluding that "[t]he plaintiffs have not properly exercised their rights under the [o]ption [a]greement and thus, cannot enforce any rights they may have under the [p]urchase and [s]ales agreement . . ." Astor Street Financial v. Green, supra, Docket No. 06 6000402.
In the present case, the terms of the contract called for the payment of two nonrefundable deposits, and expressly provided that "any missed payment will result in bre[a]ch of contract." The court finds that the plaintiff and Betancourt failed to pay the additional deposits pursuant to the agreement of July 2, 2003 (Exh. 3); the court discredits the testimony that any extensions were agreed to by Digiovancarlo and believes the testimony of Digiovancarlo that he considered the agreement breached when the deposits were not paid. "It is a general rule of contract law that a total breach of the contract by one party relieves the injured party of any further duty to perform further obligations under the contract." Shah v. Cover-It, Inc., 86 Conn.App. 71, 75, 859 A.2d 959 (2004). The plaintiff is not entitled to the relief he seeks in the form of either specific performance of the option agreement or an injunction preventing Digiovancarlo from selling the property. Since this issue is dispositive of the plaintiff's claims in count two, the court need not reach Digiovancarlo's special defenses, that the claim is barred by the statute of limitations contained in § 47-33a, or that the agreement is unenforceable under the statute of frauds, General Statutes § 52-550. Although the plaintiff, in his brief, has not made a claim for damages against Digiovancarlo, the Court nonetheless finds that the plaintiff has failed to sustain his burden that he is entitled to such damages. Judgment shall enter as to the defendant Michael Digiovancarlo.
Finally, with respect to count one as it pertains to Champs, it is unclear exactly what claims the plaintiff is asserting. He claims that, from July 2003 until he was locked out of the business in September 2004, he worked at Champs full-time, morning till close, on many days and that his duties included ordering stock, loading stock and managing the business including doing the advertising. He claims that he expended a large sum of money repairing and improving the premises. In addition, he claims to have advanced moneys to Betancourt over and above the $6,000 he claims to have given Digiovancarlo as the initial deposits for the purchase of the real estate (Exh. 3). Although Betancourt testified that he contributed to this deposit, the fact remains that whatever each party contributed the deposit was nonrefundable and, therefore, lost when the agreement was breached because the plaintiff and Betancourt failed to make the requisite additional deposits (Exh. 3). The other moneys expended for the goods and services listed on exhibit 4 he claims to have paid in cash. Of the receipts submitted (Exh. 5), only two, Grasshopper and Pellot, were addressed to him and marked paid. The plaintiff had access to the daily cash receipts and his testimony that he paid for even those items from cash from his own funds was not credible. There were receipts in Exhibit 5 from Digiovancarlo to the plaintiff.
Digiovancarlo testified that he did not prepare them, and further testified that he received no cash for the services that he performed but was given in kind goods for services. The other receipts submitted did not acknowledge delivery to the plaintiff or payment by him. The plaintiff's testimony was not credible. He testified that during the time he worked at the restaurant he was out of work as a correction officer and was collecting workers' compensation, yet also testified that part of his duties at the restaurant was loading stock. He claimed that he managed the business, but in an incident report dated December 10, 2003, (Exh. F) concerning a police incident at the restaurant Champs bar, the plaintiff stated in his report that the incident occurred at a "friend's bar" and states that even though he told a police officer that he was the manager that really was not his "official position."
The testimony of Jacqueline Rosario called as a rebuttal witness did not add credence to the plaintiff's testimony. She did testify that he regularly worked at the bar. She testified that she saw him pay workers. She also testified that the business generated $4,000 to $6,000 a week. There was no credible testimony as to the amount of money the plaintiff paid to workers from his own funds. Even if she did see him pay workers, the plaintiff did not convince the court that any moneys given to workers came from his own personal funds. The plaintiff's testimony was not credible and he has failed to sustain his burden in connection with his claims for any damages.
As previously noted, however, despite all the above evidence, an examination of count one of the complaint does not readily reveal what claims, if any, the plaintiff is asserting against Champs. The court may not consider claims not specifically raised in the complaint. See Stafford Higgins Industry, Inc., v. Norwalk, supra, 245 Conn. 575; Pergamet v. Green, 32 Conn.App. 644, 654, 630 A.2d 615, cert. denied, 228 Conn. 903, 634 A.2d 296 (1993) (reversing judgment of trial court for plaintiff because it was based on breach of fiduciary duty, a matter not pleaded by plaintiff); see also Cavolick v. Desimone, Superior Court, Complex Litigation Docket at New Britain, Docket No. X03 CV 99 0501611 (July 30, 2003, Aurigemma, J.) ("the court will not consider this claim because it was not raised in the Third Amended Complaint"), aff'd, 88 Conn.App. 638, 870 A.2d 1147, cert. denied, 274 Conn. 906, 876 A.2d 1198 (2005); Pendarvis v. Harrison, Superior Court, judicial district of New Haven, Docket No. CV 98 0408681 (March 7, 2001, Pittman, J.) ("The plaintiff has not raised the statute of limitations as a bar to the defendant's claims, and so the court will not consider it"). In any event, he has failed to present any credible evidence to support any claims for relief as against Champs and therefore the court will render judgment in favor of the defendant Champs LLC.
His brief sheds no light on this subject, merely requesting that the court find that Betancourt was the owner of the business when he quitclaimed it to the plaintiff.
The plaintiff does claim that he expended money out of pocket for the benefit of the business, which might conceivably be regarded as a claim for restitution; however, the court discredits the plaintiff's testimony that he made out of pocket expenditures for the benefit of Champs, and the plaintiff has not specifically set forth any basis for relief other than the purported partnership agreement with Betancourt. His prayer for relief requests specific performance of the partnership agreement, which has already been held to be moot, and "damages," but he has not set forth any basis by which Champs is liable to him for any damages.
Judgment shall enter as to both defendants, Michael Digiovancarlo and Champs, LLC.